$1 Million: A Legal Sticky Wicket

July 27, 2000|By VIRGINIA ELLIS Los Angeles Times

SACRAMENTO, Calif. — In his final days as state insurance commissioner, Chuck Quackenbush approved contracts obligating California taxpayers to pay more than $1 million in legal fees to lawyers representing the commissioner and his top staff in investigations of wrongdoing.

The largest contracts provided for payment of up to $700,000 to a team of lawyers that helped Quackenbush defend himself in proceedings that included hearings before the Legislature, an inquiry conducted by the attorney general, a taxpayer lawsuit and a complaint against him pending before the Fair Political Practices Commission, the state board that oversees campaign financing.

Other contracts provided for payment of legal fees of up to $150,000 each for former chief legal counsel Brian Soublet, Chief Deputy Commissioner Michael Kelley and Deputy Commissioner Mark Lowder.

The contracts were authorized under a provision in state law that requires taxpayers to foot the bill for defending government officials who face legal action as a result of official decisions.

But some familiar with the law say evidence shows that Quackenbush acted outside his authority, and therefore should not receive taxpayer help with legal bills.

Quackenbush left office July 10 after revelations that his department had reached secret settlements requiring insurance companies accused of mishandling claims from the 1994 Los Angeles earthquake to contribute $12.8 million to foundations he created.

Court documents show that the foundations were used in efforts to enhance Quackenbush's political image by financing polling and television spots that featured him. They are now the targets of an inquiry by state Attorney General Bill Lockyer and a criminal investigation by the FBI.

Sacramento criminal defense attorney Don Heller, who represents Quackenbush, said Quackenbush will seek modifications in the contracts to require the state to pay for legal costs in the federal inquiry.

Lockyer, who must give his consent when the state hires private lawyers, agreed in a May 19 letter that Quackenbush and his aides could employ outside counsel for the legislative hearings. He said his office could not represent department officials because it was one of the agencies investigating the commissioner's activities.